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Ralph Nader > In the Public Interest > Prescription Drugs

When it comes to the prices patients must pay for prescription drugs, what a difference a national boundary makes.

In the United States, the price of Aldomet (per 100 tablets), a drug to treat high blood pressure, is $18; in Canada, consumers pay $8. Other major brand name prescription drugs cost from three to ten times more in our country than they do in our neighbor to the north.
Furthermore, the prices of prescription drugs in the U.S. have skyrocketed since 1981. Letters from elderly Americans, over­whelmed by what these prices are doing to their budgets, plaintively ask why? Why doesn’t the government do something, they ask? Why have prescription drug prices risen 56% between January 1981 and June 1985 compared to 23% for the overall consumer price index?

There are answers to these questions. First, the federal government does not control drug prices. Nor do the states drug patent monopolies set many prices. The generic drug substitution laws are lowering some prices, but the drug companies are spreading falsehoods and fear about these drugs not being of the same effectiveness or safety as are brand name drugs.

Too many physicians continue to prescribe by brand name instead of by generic. By contrast, generic drugs must meet the same Food and Drug Administration standards as do brand name drugs. Which is why Bethesda Naval Hospital and Walter Reed Army Hospital use generics to treat members of Congress and high government officials.

Up in Canada, they do things differently. In 1969, legislation was passed to lower drug prices through a system of compulsory licensing of generic drugs. In short, a drug company which had a 17 year patent protection henceforth had to license to other firms the right to manufacture import and sell generic alternatives to patented drugs. In return, the patent holder received a 4% royalty for the life of the patent. In practice, this policy has meant

that within 4 years or so, generic competitors are on the market to provide price-reducing competition. This law saves Canada over $350 million a year. Most elderly Canadians receive prescription drugs without a charge under the health policies of the Provinces.

Aided and abetted by the Reagan Administration, the U.S. drug multinationals, who sell the same drugs in Canada as they do in the U.S., have been pressuring the Canadian government to change the 1969 law and allow monopoly rights to new and some existing drugs. Prime Minister Brian Mulroney agreed to a bill which would give 10 years of monopoly rights to any new drug and 7 to 8 years of exclusivity for drugs now on the market, but not yet subject to generic competition.

Since Mr. Mulroney’s party controls the House of Commons in Ottawa, the bill sailed through. The stage was just about set for another cave-in to corporate power from south of the border. Canada’s enviable record of having among the lowest drug prices in the western world was about to end.

But, wait. The usually complaint Canadian Senate, an appointed body, rejected the government’s bill last week, leading to a constitutional deadlock. If the Senate holds firm, the two chambers will have to have a conference, the first since 1947, to work things out. Liberal Party opponents of Mr. Mulroney are charging that the Reagan Administration openly wants to change the Canadian law to avoid other countries’ copying the Canadian way to force down drug prices.

What a way to treat a neighbor who is trying to show us that health comes before gouging.